Strategic Control and Reward Systems Quiz

Study Notes

Strategic Control and Reward Systems

Essential component in achieving competitive advantage through organizational design.
Functions as an internal governance mechanism aligning the interests of principals (owners) and agents (employees).

Organizational Culture

Acts as a powerful motivator and control system within an organization.
Strong norms are crucial, influencing overall group productivity through peer control.
Values and norms offer frameworks for managing unpredictable situations.

Input Controls

Designed as mechanisms within the strategic control and reward system.
Aim to define and guide employee behavior using explicit, codified rules and standard operating procedures.
Considered necessary before engaging in value-creating activities to ensure alignment and predictability.

Types of Input Controls

Establish pathways to achieve goals and outcomes consistently.
Include budgeting processes, standard operating procedures, and organizational policies to streamline operations.

Output Controls

Focus on guiding employee behavior by outlining expected results without specifying how to achieve them.
Encourage flexibility and creativity in problem-solving, allowing for varied approaches to meet objectives.

Traits of Output Controls

More effective in contexts where performance is closely linked to effort put in by employees.
Best utilized in organizations concentrating on a single business model or those employing unrelated diversification, where collaboration is minimized.
Foster an environment that emphasizes work output, potentially diminishing intrinsic motivation among employees.

Description

Test your understanding of strategic control and reward systems within organizations. This quiz covers concepts such as organizational culture, input controls, and the different mechanisms that ensure alignment and productivity. Dive in to see how these elements contribute to achieving competitive advantage.